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Baidu is difficult on the cloud, it is difficult to challenge AT at the beginning

via:博客园     time:2019/3/4 13:32:47     readed:272


Text / dawn

Source: Burning Money (ID: rancaijing)

Li Yanhong is leading Baidu "to open up the clouds".

Baidu Cloud announced revenue data for the first time on Baidu’s 2018 financial report conference on February 22nd.In the fourth quarter of 2018, revenue was 1.1 billion yuan.

According to media reports, Baidu Cloud will become Baidu's strategic-level business in 2019. Baidu has set a target of 10 billion yuan in revenue, and will expand the recruitment of nearly 2,000 people. This year, the number of Baidu Cloud employees doubled.

This may be a bold attempt by Baidu to actively seek the next revenue growth point.

Baidu's 2018 Q4 and full-year unaudited financial report show that Baidu's total revenue for Q4 in 2018 was 27.2 billion yuan, up 22% year-on-year; net profit attributable to Baidu was 2.1 billion yuan.It fell 50% from the same period of last year, which undoubtedly aggravated Baidu's troubles.

Baidu has been affixed with the "conservative" label, in the search for the construction of the siege, "muffled big money", and was questioned missed mobile Internet opportunities. For this reason, Baidu has not invested in O2O, all in artificial intelligence, and has invested heavily in the feed stream business, but still can't get rid of the argument that it has been sung.

In the history of Baidu's development, the proportion of advertising-based advertising revenue to total revenue was over 90%, but this proportion is decreasing year by year.In 2018, Baidu's advertising revenue accounted for 80% of total revenue, the lowest in history. On the other hand, “other business” is contributing to Baidu’s revenue.Compared with 2017, 50% of Baidu's new revenue of 17.068 billion yuan in 2018 comes from “other business”.

Baidu needs to find new sustainable sources of income outside of search. But many people in the industryBurning financeIt is said that Baidu Cloud's industry status is not ideal, and Baidu Cloud alone carries the next big revenue challenge.

Quarterly revenue growth is low

In the past, Baidu has been trying to find a balance between business realization and future layout. In the past, the revenue structure of search advertising revenue accounted for more than 90%, on the one hand, it proved the dominant position of Baidu's core business, and it also became the dilemma of Baidu's diversification. But in the Baidu Q4 earnings report, this structure began to show signs of change.

On February 22nd, Baidu released 2018 Q4 and unaudited financial report for the whole year. There are two points that are most worthy of attention. First, Baidu Q4's quarterly revenue growth rate was 15%, reaching a new low of nearly six months. The second is 2018. In the whole year, other income accounted for 20% of total revenue, the highest in the past five years.


Since Q3 2017, Baidu's quarterly revenue growth rate has remained above 20%, up to 29%, and has continued to decline since then. By 2018, Q4 has dropped to 15%. However, although the quarterly revenue growth rate is obviously declining, it is still higher than the second half of 2016.

2016 is an important node for Baidu. This year, Baidu suffered a "blood friend post bar event" and "Weize Zexi incident", and was investigated by the National Network Office investigation team, Baidu stock price fell. This directly impacted Baidu's advertising revenue, reflected in financial data. Baidu's revenue in Q3 and Q4 in 2016 showed a year-on-year negative growth.

After the Wei Zexi incident, relying on iQiyi's advertising revenue growth and the promotion of information flow advertising business, Baidu regained a city in the second half of 2017, and then maintained double-digit revenue growth, and in 2018 Increase the proportion of other income to 20%.


Another set of data is that from Q4 2017, the contribution rate of other income to Baidu's revenue has continued to rise, from 20% to 79% of Q4 in 2018.

According to the financial report, Baidu's other income in Q18 in 2018 was 5.998 billion yuan, a year-on-year increase of 104%. This part of the revenue is mainly due to the strong growth of iQiyi membership services, cloud services and other services.

Another data to note is that Baidu's 2018 Q4 net profit was RMB 2.1 billion, a 50% decrease from the same period last year. This is Baidu's net profit for the first time since the Wei Zexi incident in 2017.

Layout next-generation IT infrastructure

Baidu began to use AI as its key strategy in 2017, and introduced Lu Qi to carry out drastic reforms, successfully pulling Baidu out of the quagmire and re-entering the development track. However, Lu Qi’s departure made Baidu’s all in AI strategy more uncertain.

More importantly, the commercialization of artificial intelligence is still a problem for most manufacturers. Baidu artificial intelligence DuerOS and Apollo will not see the benefits in the short term. Before the top of the search bidding revenue peak, Baidu needs to find a growth engine that is equally strong or has potential in the future. Baidu Cloud is therefore expected to be high.

The impression of ordinary consumers on Baidu cloud mainly stays on products such as network disk. Some technology companies are driven by data storage and other businesses, because of the cooperation with cloud service providers such as Baidu Cloud. However, Baidu’s ambitions in the cloud business are obviously not only at the product level.

The investment manager of an investment institution told the Finance and Economics that from a technical point of view, cloud services may become the next generation of IT infrastructure, which is the main reason for large enterprises to deploy cloud services.Artificial intelligence needs to be integrated with the industry and needs the support of the cloud. In addition, the commercialization potential of cloud services is relatively large.

As early as the Baidu AI Developer Conference in 2017, Lu Qi emphasized the strategic significance of Baidu's cloud business as Baidu's president and chief operating officer. He believes that Baidu's intelligent cloud business faces huge development space in the context of commercialization of artificial intelligence and accelerated industrialization. One of its commercialization paths is to provide AI industry solutions.


“Baidu has always wanted to promote the toB business. Cloud service is a very good cut. In addition to its strategic significance, it can also increase revenue in business. ”The above investment manager said.

The CEO of an artificial intelligence advertising company also agrees with the commercial value of cloud computing in the future. He believes that “cloud computing is the next-generation business platform. This is a big trend. Baidu’s investment is not big enough, and it’s a bit late, but because It is a strategic trend, so I don't want to be left behind. ”

It is difficult to challenge AT at the beginning of the start.

Baidu wants to focus on cloud business, the first is the competition from Ali and Tencent.

In BAT, Ali has the earliest layout in the field of cloud computing. The demand for algorithmic computing power of Ali E-commerce business gave birth to Alibaba Cloud in 2009. Tencent Cloud was established in 2013 and Baidu Cloud was established in 2016. Coincidentally, in the second half of 2018, the three giants unanimously upgraded the cloud computing business unit.

In September 2018, Tencent established the cloud and smart industry business group; in November, Ali upgraded Alibaba Cloud to Alibaba Cloud Intelligent Business Group; in December, Baidu upgraded ABC Intelligent Cloud Business Unit to Intelligent Cloud Business Group (ACG). In addition, Tencent and Baidu disclosed the revenue data of the cloud business for the first time in the 2018 Q3 and Q4 earnings reports.

Alibaba Cloud has taken advantage of the first move. In 2018, Alibaba Cloud's revenue reached 21.36 billion yuan. Tencent Cloud's revenue for the first three quarters of 2018 was 6 billion yuan, and Baidu Cloud's 2018 revenue for Q4 was 1.1 billion yuan. Based on this calculation, Alibaba Cloud's revenue in 2018 will exceed the sum of Tencent Cloud and Baidu Cloud. In the eNet Silicon Valley Power Union and the Chinese Academy of Sciences Ciweek Internet Weekly released in the "2018 China Cloud Computing Enterprise Top 100 list", the top three are Aliyun, Tianyiyun, Tencent Cloud, Baidu Cloud ranked seventh.


An entrepreneur engaged in the privatization of enterprises said to the fuel economy that the current players in the cloud computing industry in China are dominated by giants, mainly in the public cloud field. The market pattern is that Alibaba Cloud is the only one, and Baidu Cloud’s industry status is not ideal.

According to data published by market research organization IDC,Alibaba Cloud, Tencent Cloud and China Telecom ranked the top three in the public cloud market in China, with market shares of 43%, 11.2% and 7.4% respectively, and Baidu Cloud only 3.3%.

A notable feature of the cloud computing industry is the scale effect, which is the winner. This means that cloud service providers that already have an advantage will have the opportunity to build strong industry barriers and put pressure on the latecomers. According to Gartner data, in 2018, the global cloud computing “3A” camp led by Amazon AWS, Microsoft Azure and Alibaba Cloud accounted for more than 70% of the market.

“The larger the size of cloud service providers, the lower the hardware cost, the lower the price. In the case of comparable services, customers are cheap and stable. ”The above entrepreneur said thatHe believes that from now on, it is difficult to reverse the situation of Alibaba Cloud.

A cloud-based verification service company is currently deploying its products in Huawei Cloud. Prior to this, the company used Alibaba Cloud and Baidu Cloud. An employee of the companyBurning financeSaid, "In terms of experience, some products of Baidu Cloud have a general experience, but the price advantage is obvious. ”

The above-mentioned artificial intelligence advertising company CEO said,“Baidu still wants to make achievements in the field of to B, but the challenge facing Baidu Cloud is not small. For Baidu, there is almost no opportunity to do infrastructure in the cloud computing field, and future opportunities are in modular services. ”

Several transformations to find a breakthrough point

After the release of the Q4 financial report in 2018, Li Yanhong said in an internal mail, “2018 is a crucial year for Baidu, and the company is exploring the commercialization of artificial intelligence. & rdquo; Baidu needs to find a practical path to take root in the long-term exploration of artificial intelligence.

A recognized reality in the industry is that Baidu started with technology, so Li Yanhong believes that Baidu has a natural foundation for artificial intelligence. “With the advent of the artificial intelligence era, Baidu has been much more comfortable. Our AI layout is very early, and the essence of search is an artificial intelligence problem. & rdquo; Li Yanhong said.

But Baidu’s performance in recent years is not the case.

In 2005, Baidu listed on NASDAQ, creating the highest single-day gains for overseas companies in the US capital market for more than 200 years. In 2011, Baidu's market value exceeded Tencent and became the highest Internet company in China. That year, China’s richest man was Li Yanhong.

14 years after the listing, Baidu's annual revenue reached 102.28 billion yuan, the latest market value is 56.4 billion US dollars, but the market value of the other two BAT's Ali and Tencent are 475.7 billion US dollars and 412.8 billion US dollars, Baidu has already fallen first camp.

Baidu left the outside world with an unclear impression of strategic direction, and several transformational explorations did not have outstanding achievements.

In the wave of mobile Internet, Li Yanhong said that he would use 20 billion to lay out O2O, but Baidu did not stand on the door of the mobile Internet. According to Nomura Securities' analysis of Baidu's earnings, its 2016 Q1 profit decreased by 18.6% year-on-year, mainly due to continued O2O investment. Later, Li Yanhong admitted, “When the mobile Internet came, we did not stand a bit unstable, but we must win and always work hard”.

The most typical is "Li called the beast event". In 2016, Baidu acquired Li called Beast and its company, making Li Jing, 25, the youngest vice president in Baidu's history. At that time, Baidu was in the dilemma of public opinion and business decline. But in the end, it proved that this was a failed attempt to lose 100 million yuan in information flow.

After 2016, Li Yanhong began to mention Baidu's AI strategy many times in public. The addition of Lu Qi boosted the market value of Baidu by nearly 30 billion US dollars, and also made the strategic direction of Baidu all in AI clear. However, Lu Qi’s departure allowed Baidu to evaporate 10 billion US dollars in three days. Li Yanhong had to re-take the second half of Baidu AI.

O2O, information flow, artificial intelligence, these areas have been high hopes of Baidu, but none of them can spur the proportion of advertising in Baidu's total revenue. Nowadays, the O2O war has already died down. The artificial intelligence products will not see the possibility of continuous large-scale revenue in the short term, and the information flow business will face the severe challenges of competitors such as today's headlines.


Baidu's latest architecture adjustment stayed at the end of 2018, upgrading the smart cloud business and promoting “Baidu on the cloud”. Baidu cloud expansion will be the first step in a series of combination boxing.

From a hundred billion revenue Baidu, back to a respectable Baidu, Li Yanhong has to do not only to open the clouds, but also to point out the direction.

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